Ensemble Secures $115M Loan for Waterfront Hotel in Supply-Constrained Santa Cruz
Ensemble Investments has restructured its debt on its new waterfront hospitality offering in Santa Cruz, California, La Bahia Hotel & Spa. The CRE firm has secured a $115 million first mortgage loan with a five-year floating rate — underscoring its continued belief in the property's potential.
Madison Realty Capital in partnership with Newbond Holdings, originated the refinancing. Sonnenblick-Eichner Company arranged the deal.
It comes just months after the 155-room hotel opened in September 2025. Madison Realty went as far as to say that the asset has the upside to be one of the most successful beachfront properties in all of Northern California.
"La Bahia is an irreplaceable asset in a market that has long been underserved by true luxury hospitality. The property's beachfront positioning along Monterey Bay gives it a structural competitive advantage that is extremely difficult to replicate," Samir Tejpaul, managing director and head of investments at Madison Realty, said in a statement.
"Having recently closed the Hotel Nia financing with Ensemble Investments, LLC, we have seen firsthand the operational depth and institutional credibility this team brings to complex hospitality assets across the Bay Area, and we are pleased to deepen that relationship with this transaction."
Plus, there is limited existing supply of luxury hospitality in Santa Cruz, according to Sonnenblick-Eichner.
Amenities at La Bahia include 13,720 square feet of meeting and event space, a spa, a fitness center, a lobby bar, three dining options and a pool with a hot tub.
But supply constraints for hospitality aren't just subject to Santa Cruz — this is a national trend, according to Marcus & Millichap. A recent market update from the CRE brokerage revealed that sector deliveries are now down 34 percent compared with 2019, as a result of high construction costs and elevated financing. Performance-wise, there is a bifurcation: economic hotels are slumping, with luxury, upper-upscale and upscale hotels showing durability thanks to the strength of wealthier consumers.
Source: GlobeSt/ALM